Submitted by Rachael C. Li, Independent Healthcare Broker, Health Plans
According to AARP Public Policy Institute, drug prices are increasingly becoming a burden to senior adults. Matt Eyles, president and CEO of America’s Health Insurance Plans, commented on May 8, 2019, “Drug prices are out of control affecting millions of American families every day.”
Drug manufactures are required to be transparent in their drug pricing, including listing prices in television advertisements. President Trump signed and implemented legislation to end the Pharmacy Gag Clauses, which prevented pharmacies from informing consumers about accessing prescriptions at a lower cost.
CMS Administrator, Seeman Verma said, “from 2013–2017, prescription drug spending grew at an average annual rate of 10.6 percent in Medicare Part D, 10.0 percent in Part B, and 14.8 percent in Medicaid — this is the fastest area of growth.” Total prescription drugs gross spending in 2017 were $154.9 billion in Medicare Part D, $30.4 billion in Part B, and $67.6 billion in Medicaid from cms.gov.
Low Income Subsidy (LIS) or Extra Help, is a Federal Subsidy Program that helps limited income Medicare Beneficiaries save up to $4,900 per year on their Medicare Part D prescription plan premium, coinsurance, copays, and prescription drugs. There are two levels of help — Full Extra Help and Partial Extra Help. Those with lower income and fewer resources will receive full subsidy and partial subsidy for those with higher income and resources.
Those eligible for Full Subsidy Extra Help may pay no monthly premium for their Medicare Part D Plan. There’s no drug deductible and reduced prescriptions copayment up to $3.40 generic or $8.50 for brand name drugs. Full Subsidy will have no drug copay once the $5,100 limit is reached.
Partial Subsidy Extra Help beneficiaries get reduced $85 drug deductible, 15% coinsurance for plan covered drugs and copays of $3.40 for generic or $8.50 brand name drugs after reaching the $5,100 limit.
They both get drug coverage in the gap and may get their Medicare Part D late enrollment penalty waived. Extra Help beneficiaries are allowed to change plans each of the first three quarters and during AEP which starts from October 15th and ends on December 7th.
Medicare consumer must meet these requirements to qualify for Extra Help:
The threshold for 2019 income and assets for LIS is as follows:
- They must have Medicare Part A and or Part B
- They must reside in 1 of the 50 States or the District of Columbia.
- They must meet the Income and Resource Limit.
Income < $18,735 Annual
Resources < $14,390 Annual
Income < $25,365 Annual
Resources < $28,720 Annual
Income includes Social Security Benefits such as retirement income, Railroad Retirement Benefits, Pensions or Annuities, Wages (Pretax) or Net earnings for Self Employed, and Rental Income.
Resources are cash at home, checking, savings, CDs, stocks, savings bonds, mutual funds, IRAs, and 401(K) accounts. Real Estate other than primary home is also taken into account under resources. Excluded resources are primary home, all vehicles, household goods or furnishing, and life insurance.
Applicant can call Social Security at 800-772-1213 or obtaining the form from Social Security and apply by mail. Application for LIS is usually easier and faster online. Social Security will then send a notice of approval or denial to the consumer within three weeks. The notification letters are in seven different colors: Purple, Yellow, Orange, Green, Tan, Blue, and Grey. Each colored letter notice represents the reasons and status of LIS approved or Loss of Deem status.
Medicaid eligible enrolled in Medicare Savings Program do not need to apply for LIS. They automatically get Extra Help. Medicare enrollee’s individual income less than $1,041 or $1,410 married per month can also seek Medicare Savings Program or AHCCCS to check eligibility.
Still have questions about Medicare or Medicaid? Contact Rachael C. Li, an Independent Health Insurance Broker, by phone at 480-567-8696 or email firstname.lastname@example.org. Helping you make an educated decision in your health plan.
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